What is your fee structure?

As a licensed agent, I work entirely on commission, which I receive only if I initiate and complete a transaction. I am compensated when you take ownership of your new home or when your home has been sold.

How much house can I afford?

This is an important question. Before you begin your search for a new home, you will need to determine how much you can comfortably afford. One way to do this is by getting prequalified or preapproved for a home loan. As your real estate agent, I will help you select a mortgage lender – someone I have done business with in the past and feel comfortable recommending.

Is there a difference between preapproval and prequalification?

Yes. A prequalification can be done online or over the phone and does not require your submitting financial documents. You will be asked to provide basic information about your finances — for instance, your household income versus your debt load. With this information, the lender will estimate what your maximum loan amount could be if you were to apply.

A preapproval is more involved, but you are in a stronger position with a preapproval letter as it lets both agents and sellers know that you serious about your search. The lender will perform a review of your finances, credit accounts, bank statements and other information. This figure will not only be a more reliable estimate of what you can afford, but your preapproval also indicates that a lender is willing to do business with you, pending the purchase price, market appraisal and the underwriting process.

What is your home loan process?

Once you’ve decided upon a mortgage lender and before you begin the loan application process, you can ask for a preapproval letter. Once approved, your lender can issue a preapproval letter subject to you finding your perfect home. Then, when you have found your perfect home, simply call your lender to complete your application. You will then have the opportunity to lock in interest rates, fees, and ask questions as you complete the process.

Lenders will vary in the types of information they will ask to complete your loan application process. As most systems are completely automated now, oftentimes they can verify data with a W-2, a pay stub, a bank statement, and identification. You should ask your lender prior to the application process what types of information will be needed to process your loan – that way, you can be prepared and avoid any unnecessary delay.

Depending upon your lender, an appraisal and home inspection may be required. An appraisal determines the value of the property you are purchasing. Typically, an appraiser will inspect both the inside and exterior of the home. However, in some cases, only an exterior inspection is needed based on your financial strength. Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you've found the perfect home. Remember, you can accompany the home inspector during the home inspection. This is your opportunity to ask questions about the condition of the home you are purchasing. Generally, the buyer pays for the appraisal and home inspection.

What is earnest money?

Most offers to buy a house are accompanied by a check. This check is generally referred to as the "earnest money deposit," which is a portion of the down payment. This deposit is given at the time the buyer completes a purchase contract with their real estate agent. The agent will open and deposit the earnest money into an escrow account with the title company, who will act as the neutral third party. An earnest money deposit says to the seller: “Yes, I am serious about buying your house.”

What is escrow?

An escrow is a neutral third party. The escrow process is a legal procedure for handling the details of the transaction from the time the purchase agreement is accepted until the title is transferred and the sale is completed. Escrow is managed by a title company. The escrow officer is a neutral third party in the transaction, and must complete specific instructions, received from the buyer’s and seller’s agents, before title is transferred and funds are disbursed. The escrow is usually opened by the next business day after mutual acceptance of the purchase agreement and the buyer’s earnest money is deposited into the escrow. Preliminary Title Report – The title company searches the public records for pertinent information about the property. Who is the owner of record? Are there any judgments that might have to be cleared before title can be transferred? Any such items must be resolved during the escrow period.

What happens at closing?

The closing will take place at the office of a title company in your area who will act as the escrow officer. During the closing you will be reviewing and signing several loan papers. The escrow officer conducting the closing should be able to answer any questions you have at that time. Once all of the necessary steps are completed, the buyer's lender will notify the title company that the buyer's loan request has been approved. The lender will send the buyer's loan documents to the title company so that the documents can be signed at the closing appointment. At this time, the title company will schedule a closing appointment with the buyer and seller (separate appointments). This process usually takes about 1 hour.

If you have a question that is not answered here, please don’t hesitate to call me at (541) 740-6574 or email me at sharp@kw.com.